Employee Loyalty and Career Development Effects

Introduction

Career development is a human resource practice that in theory is a designed pathway for employee growth, development, and acquisition of relevant labour skills to modern knowledge economies, and overall labour market preparedness as well as being an organizational employee retention scheme (Karatepe & Karadas 2015). Career development is a sequence of activities and related work experiences that are directed towards personal growth and organizational goals that is a lifelong experience which is partially influenced by others and partly influenced by the organization. The definition points to the responsibility of both the organization and the individual. While different perceptions and components have been used to define career development, in this study, training and development will be the core components defining career development. However, the question of if career development has any effects on employee loyalty arises. In theory, Dries et al. (2014) argue that the assumption of positive outcomes underpin organizational keenness in designing and developing career development programmes, which Dhar (2015) argues that it is aimed at increasing employee loyalty for the benefits of better organizational performance. Employee loyalty is investigated in the context of affective commitment and continuance commitment. Affective commitment and continuance commitment are defined in the context of a three component commitment model that factors the third dimension, which is normative commitment. Affective commitment is defined in the context of having emotional attachments to the organization while continuance commitment is defined in relation to the costs associated with leaving an organization. Lyons, Schweitzer and Ng (2015) note that by combining the best of the characteristics of continuance commitment and affective commitment, better employee performance can be achieved. The tension of if career development directly increases employee loyalty through positive outcome of employee commitment by increasing job performance, lowering absenteeism, improving professionalism at work, enhancing perception of job security, increasing work satisfaction, improving employee competencies, strengthening psychological and physical mobility underpins this study. The desire to continue working for an organization is a strong indicator of loyalty. In all these, behaviour and attitude play a significant role in establishing a sense of loyalty. Attitude and behaviour can be molded and the molding factor is career development embedded in training and development.

Despite different approaches that have been suggested on career development, in this discourse, it is suggested that career development is a component that can be achieved through training and development, promotion, and administration of incentives.

According to Lyons, Schweitzer and Ng (2015), the test of employee loyalty relies on the level of commitment, which leads to better organizational performance. However, the tension between career development and the components of employee loyalty needs to come out distinctly. In this discourse, the investigation will center on the elements of training and development as the elements that define career development which are predictors of employee loyalty. Here, a problem emerges on the use of empirical facts to arrive at the conclusion on the positive effects of career development on employee loyalty. To address the problem, this study uses two components of career development, which include training and development, and loyalty is measured on the two components of affective commitment and continuance commitment.

Statement of the problem

A lot of literature exists detailing the positive aspects of career development in the context of training and development to match career goals and align them with organizational objectives. However, empirical evidence is lacking on how achieving job satisfaction, intent to stay, and better service quality leads, the core components of career development lead to employee loyalty in the context of affective commitment and continuous commitment (Albdour & Altarawneh, 2014). This leads to the following research questions.

Research questions

• What is the relationship between career development and employee loyalty?
• What are the effects of training and development on organizational affective commitment?
• What are the effects of employee training and development on organizational continuance commitment?

Research objectives

• To establish the relationship between career development and employee loyalty.
• To determine the effects of training and development on organizational affective commitment
• To establish the effects of training and development on organizational continuance commitment.

Research aim

The study aims to establish the impact of training and development on employee loyalty. In this study, career development is investigated in the context of training and development while loyalty is investigated in the context of affective commitment and continuance commitment.

Hypothesis

1. There is a significant relationship between career development and employee loyalty
2. Employee training and development has positive effects on affective commitment
3. Training and development has a significant relationship with continuance commitment

Literature Review

Career development and employee loyalty

Organizations that provide employees with growth opportunities and career development paths according to Albdour and Altarawneh (2014), aim to attract and retain best performing, highly motivated, and dedicate employees who direct their energies and efforts towards fulfilling the functions and objectives of the organization. Career development is regarded as a human resource function that inculcates the psychological perceptions and attitudes in the minds of employees that they are on an upward movement or progression. This leads to employees who are psychologically attached or linked to the organizational obligations that asymmetrically tie the employer and the employee together. Reciprocity and mutual interdependence persists to the extent that Albdour and Altarawneh (2014) regard it as inculcating a sense of loyalty. A loyal employee is characterized by a strong sense of attachment to an organization’s values and beliefs, which are exercised by continuously exerting considerable effort towards the organizational goals. In the mind of the employee, it becomes an organizational responsibility to provide an appropriate career path that translates to better productivity and organizational performance. Lyons, Schweitzer and Ng (2015) allude to the incentives of training and development as effective drivers of organizational commitment. At the organizational level, career development emerges as a valued asset that managers cultivate as a tool to strongly tie employees with an organization resulting into highly committed employees. Loyalty is the main lever to this function. In this study, the relationship between career development and employee loyalty are investigated in the context of how training and development affects affective and continuous commitments.

Training and development and organizational commitment

Training and development is a term used to describe the lateral and upward progression of an employee in an organization while commitment is the psychological state of attachment that employees develop to the organization. Dhar (2015) develops the concept of commitment to be the defining relationship between an employee and the course of action one takes in executing organizational tasks and responsibilities and other choices of actions. According to Leekha Chhabra and Sharma (2014), effectiveness happens in the forms of better service quality, better handling of customers, and execution of duties with sincerity which leads to long terms positive relationships. Empirical evidence shows that organizations invest in the training and development of employees as a way of incorporating individual needs and expectations to effectively pursue organizational goals and objectives. Karatepe and Karadas (2015) argue that the merger between the two increases the efficiency of the employee’s input into the organization as well as the efficiency in executing their responsibilities. Effectiveness leads to the performance, the major multidimensional construct that enables better achievement of organizational goals and objectives. Performance is the key word that organizations factor when designing training and development programmes. However, different factors contribute to the performance of an organization with training being the key factor.

Affective commitment

Better trained employees according to Albdour and Altarawneh (2014) have better physical and psychological attachments and expend a lot of their efforts towards the organization. Training and development unlocks the potential to the growth of an organization which underpins the need for employees to dedicate their efforts towards an organization which leads to better commitments. Commitment is viewed positively because it is presumed to hold the key to a successful organization. Commitment can only be developed and inculcated into employees through a well-designed training and development program. Karatepe and Karadas (2015) view commitment as a concept that organizations need to dedicate efforts and skill to achieve leading to lower employee turnover as well as better talent retention. To achieve employee commitment through training and development, organizations design programmes that foster commitment. Such programmes lead to employees who work diligently, provide value for the skills and knowledge they have acquired, put every effort into the organization’s products and services, work conscientiously, and seek to exploit every opportunity that is provided for continuous improvement (Dhar 2015). Such levels of commitment and employee inputs are achieved by organizations that create an enabling environment. To prove the concept of reciprocity, in exchange, employees expect the organization to provide training and development resources as well as an environment that allows for better life work balance.

Continuance commitment

Dhar (2015) presents the idea that the overall goal of career development is to ensure better workforce utilization by promoting the achievement of organizational goals and work force satisfaction. Karatepe and Karadas (2015) argue that organizations design career development programmes to increase employee and strengthen affective and continuance commitments, which is a valued prelude to employee retention. Retention underpins continuance commitment because it assures better organizational image, positive perceptions of organizational justice, better work environment, work like balance, and employee dedication to stay in the organization for longer, which makes it hard for them to leave by fearing to disrupt their lives by leaving the organization. According to Karatepe and Karadas (2015) restructuring and introducing new career development programmes is a managerial skill that accelerates continuous commitment.

Different models of commitment have been developed and one such a model is based on compliance where employees accept the influence of the organization mainly because the organization provides them with something in return such as pay. The second element is identification where employees strive to maintain a healthy relationship with the organization expecting better outcomes. The third element of the model is internalization where the values and beliefs of an organization are compatible with one’s values, which enhances one’s affective commitment.

Sources of commitment

Organizations that endeavor to design effective training and development programmes need to identify appropriate sources of commitment for an effective training and development program. Job satisfaction has been identified as a critical source of commitment that needs to be factored into the training Programme (Eilam-Shamir & Yaakobi 2014). Despite the argument being that commitment and job satisfaction depend on personal attributes and the degree of congruence with ones’ expectations; it is imperative to note that job satisfaction leads to a greater degree of commitment. A training and development Programme must factor job experiences in order to determine the best method to positively influence organizational commitment such as making opportunities available for future development and advancement, establishing better relationship among employees, and supervisors by providing them with better pay.

Job satisfaction can be reinforced in an organization in what Albdour and Altarawneh (2014) regard as training and development by addressing the needs and values of the employee, cultivating positive attitudes, cultivating an environment of morale and life satisfaction, and creating a sense of job involvement. Here, organizations can leverage training and development towards an individual’s career development goals by use of effective systems that are counterproductive of strong affective attachments with the organizations. Studies by Albdour and Altarawneh (2014) concluded that commitment can be reduced due to lack of opportunities for growth, promotion, and development.

A company that meets employee’s work place expectations and increase self-assurance makes them to consciously choose to work for them. Besides, organizations that demonstrate strong commitment to employee have a strong influence on the perceptions towards the organization.

Methodology

A quantitative research method was used to determine the effects of career development on employee loyalty. Questionnaires were issued to a sample size of 150 respondents from the target population. The questionnaire data was collected, coded and entered into the SPSS software for statistical analysis. The goal was to conduct a simple regression analysis to establish the relationship between the depended and independent variables and justify or reject the three hypotheses to determine whether there is a significant relationship between career development and employee loyalty as well as whether training and development has positive effects on affective commitment and if there is any significant relationship between training and development and continuance commitment.

A reliability analysis was done on the questionnaire to test whether it could provide the desired results was done on a sample, which yielded positive results besides indicating that an appropriate investigation methodology was used. Validity on the accuracy of the questionnaire as a tool for data collection also yielded positive results.

Data Analysis

Table 1: Descriptive statistics of respondents’ profile

Table 1is a report of descriptive statistics summary

Table 2: gender

Table 2 reports that 67% were male and 33% female with a 100% response rate on gender.

Table 3: Educational level

Table 3 reports that 15% of the respondents had high school education while 19% had diploma qualifications, 35% with Bachelor, 22% Masters, and 9% PhD qualifications.

Table 4: Age category

Table 4 reports on the age category by showing that the percentage of people below 20 years was 17% while those in the category of 21-30 was 41%, 40-50 years was 34%, 40-50 was 3%, while 50-60 constituted 3%. A total of 98 people answered the question on age category.

Training and development vs. affective commitment

Table 6: Emotional attachment model summary

Table 6 reports an R squared value of.139 and a standard error estimate of 1.19466. Significant changes in statistics show a variation of.017 with F which had an original value of 2.913.

Table 7: ANOVA test on emotional attachment

Table 7 is a report on the ANOVA test that shows the regression sum of squares of 20.790 and a mean square value of 4.158 as well as an F test value of 2.913.

Table 8

Organizational problems as my own (Dependent variable)-Affective commitment

Table 8 reports an R² value of.282 and a change in F of 7.076.

Table 9 Problems are my own Dependent –Affective commitment

Table 9 reports an ANOVA regression value of the sum of squares to be equal to 28.736 and an F value of 7.076.

Table 10 Great personal meaning dependent variable affective commitment

Table10 provides a report of an R² value of.360 and an F value with a change of 10.106.

Table 11: ANOVA Great personal meaning

The results reported in table 11 show the ANOVA test values of the regression model of 37.121 sums of the squares and an F statistic value of 10.106.

Training and development Continuous commitment

Table 12: Hard for me to leave model summary

Table 12 is a report on the R² value of.222 and an F value of 5.127.

Table 13 Hard for me to leave

Table 13 is a report on the ANOVA test with an F value of 5.127.

Table 14: I might not consider working elsewhere

Table 15: I might not consider working elsewhere ANOVA

Table 15 is a report on the ANOVA test with an F value of 1.897 and a regression of the sum of the squares of 11.792.

Findings and Discussion

Simple regression models were used to determine if there was any significant relationship between career development and loyalty. Descriptive statistics tables shown in appendix I, which consist of the career development, indicate positive responses based on an evaluation of the elements with specific focus on the outcomes of training on employee productivity (82%), performance (79%), communication skills (74%), behavior (74%), inculcation of knowledge and skills (79%), and acquiring of management skills (81%). The results revealed that for each of the elements measured, when the quoted percentages were accumulated based on the ‘strongly agreed’ and ‘agree’ measures, a positive trend for all the variables was established. This shows a strong relationship between training with affective and continuance commitments. A regression model as depicted in tables 6 with an R² value of.139 is based on affective commitment using strong emotional attachment to the organization with the 5 predictor variables that cumulatively could provide an R² value of.695, which is equivalent to 69.5%. In each case, the R-square values are positive, which shows that the models keep getting better with new values. The results show a very strong positive correlation between the variables of interest, which verifies both hypothesis H₁ and hypothesis H₂.

1. There is a significant relationship between career development and employee loyalty.
2. Employee training and development has positive effects on affective commitment
   In each case, the p value is below 0.05, which means that the models could be adopted. The results on table 8 with an R² value of.282, table 10has an R² value of.360, 12 with R² having a score of.222, and table 13 with R² having a score of.096 verify the third hypothesis which states as follows:
3. Training and development has a significant relationship with continuance commitment

Statistical tests of the responses of the effects of training and development with a specialized focus on continuous commitment based on the descriptive statistics in appendix I shows that the relationship between training and development and an independent variable and affective and continuance commitment variable as dependent variables. The key elements that were investigated include disruption to life (63%), staying as a matter of necessity (67%), too few options of leaving (63%), negative consequences of leaving (59%), and exerts considerable personal sacrifice (60%) based on an aggregation of the strongly agree and measures of scale. The trend is evidently positive from the perspective of the respondent. Table 12 shows a R² value of.222 with the Adjusted R-square being.046 supporting the position that the model is good. The rationale is that the Adjusted R-square provides a positive measure of the fitness of the statistical model.

Conclusions and Recommendations

In conclusion, the study to investigate the effects of career development on employee loyalty has shown a strong positive correlation by taking training and development as the independent variable while affective commitment and continuous commitment were the dependent variables. The descriptive statistics results in the appendix I show very strong positive responses on the scale with the ‘strongly agree’ and ‘agree’ taking more than 60% of the response for the variables of interest. This show that those responses in the ‘undecided, disagree, and strongly disagree’ categories are insignificantly low, showing that career development based on training and development against affective and continuous commitment are positively correlated. The models generate from the regression statistics show significant positive increases for the R-square values across the models, which shows that the models can be relied on and adopted for decision making. It is worth noting that the resulting R-square values for a single element are small, but when they are accumulated across different variable elements, they provide significantly high percentages that justify the veracity of the models. Further studies on the subject could make new contributions to the management field.

Reference List

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Appendix

Appendix I

Table 15: Improves productivity

Table 16: Improved my performance

Table 17: Improves my communication skills

Table 18: Inculcates the required knowledge and skills?